telecom@eecs.nwu.edu (TELECOM Moderator) (12/11/90)
An international consortium whose principal investor is Southwestern Bell Telephone Company has paid $1.76 billion for controlling interest in the Mexico Telephone Company (Telefonos de Mexico) under a privatization program started by the Mexican government, the present owner of the phone network in our neighboring country to the south. This $1.76 billion turns out to be $2.03 per share, and gives Southwestern Bell and associates a 20.4 percent stake in the Mexican telco. The Mexican phone system, which has about 4.1 million subscribers has long been plagued with all sorts of trouble, not the least of which has been creditors looking for payment. The equipment is old and worn out, the billing practices are obsolete and in general, Telefonos de Mexico is a mess. Southwestern Bell's partners are Cable & Radio, a French company; and Grupo Carso, a Mexican firm. All I can say is if they paid $1.76 billion for a mere 20.4 percent of the company, they got ripped-off good. I don't think the entire Mexican phone network is worth a billion dollars, let alone a 'controlling interest' through 20.4 percent ownership. But that's life and big business, I guess. SWB Tel and associates have not yet announced any major changes. Maybe they are still shaking their collective heads and wondering if it is too late to back out of the deal. Patrick Townson